Preventing and detecting Financial Crime in the workplace

In April 2022, the FCA released its review of the financial crime controls at six challenger banks.

Whilst the review found evidence of good practice, in particular through the innovative use of technology, it also highlighted weaknesses which increased the financial crime risks both when onboarding customers and throughout the customer journey.

The issues highlighted by this review are not unique to challenger banks. So it is important that staff at all financial institutions understand their role in preventing and detecting financial crime.

Here are three key tips for employees: (A PDF version is available to download here.)

• Know Your Customer: Customer due diligence is not about collecting documents. It is also about addressing customer risk and understanding the nature and purpose of the intended relationship. Higher-risk customers should be identified at onboarding and enhanced due diligence must be conducted to mitigate the risk.
  
  
• Ongoing Monitoring: Due diligence and ongoing assessment of risk should be applied throughout the customer journey. Customer activity and transactions should be viewed holistically, in the light of what is known about the customer, their financial arrangements and the nature and purpose of the account.
  
  
• Escalate Concerns: If you identify a weakness in the firm's financial crime controls, you must escalate it immediately. Remember, you also have a specific legal obligation to report money laundering or terrorist financing suspicions in accordance with your procedures. In addition, you must not tip off the subject.